Tax policy debates are about how we pay for the things we do together for our communities, our families, and our economy. Working together through government allows us to accomplish things that are vital to us as a Commonwealth and that we can’t do alone. This includes the roads, subways, and buses that help us get around and allow our economy to function; the schools that educate our children and strengthen our future workforce; the police and fire protection that keep our neighborhoods safe; the environmental safeguards that maintain our clean air and water; and the safety net that protects us when we fall on hard times.
About 15 years ago, at the height of the dot-com bubble, our state made tax policy choices that have shaped state policy ever since. At the time, our economy was so strong that it seemed we could cut taxes dramatically with no consequences. The state enacted a series of cuts to the income tax that are now costing us close to $3 billion a year. We cut the tax rate on most income from 5.95 percent to 5.3 percent, costing over $1.5 billion. We cut the tax rate on dividends and interest from 12 percent to 5.3 percent, costing about $850 million. We increased the personal deduction to $4,400, costing $550 million.
Comments
Typical tax and spend liberal nonsense.
Not a single mention of waste, fraud and abuse that has become commonplace in our state government. To the author we only have a revenue problem. Come see this taxpayer when you are ready to discuss all sides of the issue.
Throwing a Fox News talking point out there without any substantiation does a disservice to your cause, assuming that cause is to make government better and not destroy it. I worked in state government for six years and from personal experience there is no more nonsense going on than there is in the private sector. In fact, I met some of the brightest, most capable and most dedicated people it has been my pleasure to work with in state government, people who easily could have been making a mid-six figure income in the private sector and were instead making a high five-figure income in state government because they believed in public service.
So yes, there is "waste, fraud and abuse" in state government, but it is not "commonplace," assuming you equate commonplace with the norm. So do us all a favor and take a look at the state budget and find something worth cutting before you tar the entire operation with the misconception that government does nothing worthwhile.
Just poor journalism - the total state budget has more than kept up with inflation. Yes some department are down - which you mention and a lot are up which you don't.
Poor state workers - take billy bulger for example 250K pension - tax free - but the private pensions are not tax free.
You guys are stealing my thunder... Noah, tying those tax cuts to the "ills" of our state is totally irresponsible as a journalist...where is the connection? High Ed has been in decline here...and we keep pumping money into it...and the teacher unions keep taking and protecting more ineffective teachers. You also seem to forget that sales tax rose, gas tax, fees rose, tolls rose, etc etc etc. Just because we don't see a rise in taxes, doesn't mean other forms of taxes don't exist. You act as if when a recession ends, we suddenly become affluent and can afford a tax increase. That's the problem with Deval's new plan...WE WERE LEFT IN A DEEP HOLE...and the minute we see any light, bang, raise taxes...and increased income will be taken. That's irresponsible as well.
Noah is no jopurnalist. He works for the MA Budget and Policy Center, a liberal tax and spend think tank.
The organization was formerly called TEAM, or Tax Equity Alliance of MA, which was also called Tax Everything And More.
noah, we have a 32 billion dollar budget in this state, how much more do they need, government is bloated, fraud and waste in welfare is strong and you want us working tax paying citizens to pay more. Have you checked gas, food, energy prices lately Noah, we can bearly afford those items. Liberals will never give up until government takes more of our pay than we do.
"paying for tax cuts" is claptrap that makes little sense. Noah should venture out to states which have lower tax rates, some have a tax rate of 0%!, and he would learn something very valuable. There is no linear, static relationship between tax rates and tax revenue. Therefore, his claim that lower ing the rate cost $850B is nonsense.
The vast economic macine that delivers a stream of tax revenue has thousand of machinations. The tax rate is certainly one factor, but it is only one out of thousands. The optimal tax rate for a state and a federal government is the one which creates the best atmosphere for doing business. as we learned in the dot com bubble, economic growth drives tax revenue far better than tax rate increases.
The desire to falsely claim this linear, static relationship is born of class envy. It gives license to liberals to claim some people "do not pay there fair share", and to claim a moral quest, in raising taz rates. It is folly. The wealthy are already paying the vast majority of taxes, and they do with rates lower than they were 30 years ago. Clearly, unequivocally, and undeniably, higher tax rates on the wealthy did not lead to greater tax collections.
So do not be seduced by the claims of the great class warriors. Their argument is not economic, it is a false claim of moral fairness.
Richmond...dead on...this article is the punchline of the joke, "What happens when you give an occupier a pen?"
"Noah Berger is President of the Massachusetts Budget and Policy Center, an independent research organization that analyzes state budget and tax policies, as well as economic issues, that affect low- and moderate-income people in Massachusetts.
Prior to joining MassBudget, Noah served as Counsel and Policy Director for the Massachusetts Senate Committee on Ways and Means from 1993 to 1996 and as Policy Director for Senate President Tom Birmingham from 1996 to 2002.
Noah writes and speaks on state tax, budget, and economic policies, and is frequently quoted in news stories on those topics. Noah graduated from Harvard College and has a JD from Harvard Law School."
In other words, Noah is a spoiled liberal brat who has never had to get a real job in the dreaded private sector, and instead can make his mark by extolling the virtues of taking from one group to give to another.
Some points on the tax question. First, the systems we rely upon for education, transportation, public health and others should be adequately funded because without them our whole civic and economic life is diminished. Those that refuse funds to maintain roads and bridges and then complain of the lousy roads and bridges are, well…deluded. Second, large organizations are needed to build cars and airplanes, fight wars, teach hundreds of thousands of kids and adults. Large organizations all suffer from some inefficiencies. Ask anyone who works for or worked for IBM or Polaroid etc. Good systems to offset these inefficiencies are always needed and will never be perfect. Finally, we live in a complex and interdependent world and managing the problems that emerge in that world requires thoughfulness, dedication, intelligence and resources. Remove any of those qualities and the whole enterprise declines…except, perhaps, for the rich and superrich. Richmond12 might call this class envy or class warfare. I think it is common sense.
Great response!
"First, the systems we rely upon for education, transportation, public health and others should be adequately funded because without them our whole civic and economic life is diminished. Those that refuse funds to maintain roads and bridges and then complain of the lousy roads and bridges are, well…deluded. "
What is "adequately funded?" Does this mean public sector unions getting ridiculous salaries, such as those who collect tolls on the MassPike getting 5 or 8 times what the same skill set obtains for a salary at a supermarket check out counter? And the pensions? How about the MBTA and the bloat there? These are not examples of "minor inefficiencies" but are just a tip of the iceberg. What really galls me about this article is saying that a tax rate decrease "continues to haunt" Massachusetts? So when it was first enacted, that was when the "haunting" started? I guess tax rates shoud NEVER go down, but only up - and this brings me to the other absurdity here, saying that they "cost us" something. That presumes that the citizens' efforts are an asset held at large to which all are entitled, particularly those who didn't contribute to its acquisition. Typical liberal income redistributionist garbage.
The problem is our nations currency has only 1/4 the purchasing power as it had in the 1970's.
We have to get used to the fact our nation prints money too freely and inflation has our economy by the throat.
The choice is between having many state sponsored social programs that overburden the taxpayer and creating a much larger underground economy that avoids paying taxes. Or just like our central and south American neighbors that talk a good game but have no money to spend.
We need to raise the progressive income tax, and not make it a flat rate. Increase the rate for those who make more. And we need to cut all these nickel and dime fees that punish the poor and middle class.
The most obvious place where the money needs to go is our transportation system. There are some bridges I fear for my life every time I drive across them. And don't get me started on the MBTA. We need a lot more buses running, and repairs to our crumbling infrastructure.
And before people start on the MBTA union, I for one was very pleased to have experienced, well-paid drivers driving yesterday in the labyrinth that was downtown Boston. I saw a couple drivers make turns with inches to spare.
I wonder if Noah Berger checks the box on his MA tax return to pay at the old, higher rate. Inquiring minds want to know!
Very doubtful! Liberals talk the talk but seldom walk the walk.
It seems there's at least 4 quilty liberals who disliked your opinion. Talk like that hits a nerve with the tax and spend liberal crowd.
lets see where the funding commons from for this organizations - gee unions - suprise ?
Unions
So you're saying that if we restore those tax levels, the more than doubling of my property taxes and most fees will be undone? Because if they're not, the shifting of costs that has occurred since those cuts, added together with the restored tax rates will put us firmly back in "Taxachusetts" range and drive residents and businesses from the commonwealth, shrink our economy and leave us with more problems and less actual tax revenue than we had back then. Especially if we raise the taxes while we're still at the beginning of a recovery.
the mass state budget has gone from an inflation adjusted 20B in 1987 to 32.5B in 2012 - that's not starving the beast - it's on average a 3% increase over inflation or a 162% inflation adjusted increase.
I love when facts get "disliked" Libs hate facts
I love when "conservatives" present distortions as facts to try to make a point. tsy please provide your citation if I am wrong, but I suspect you are playing fast and loose with numbers presented in a 2008 Massinc article comparing the budget of 1987 with that of 2006. The actual numbers, adjusted for 2007 value are: in 1987 the budget was $20.8b, and in 2006 the budget was $28b for an annual average increase of 1.6 percent above inflation. You got your 3%number by just sticking the 2012 budget on the 2007 based numbers. For shame.
What knee-jerk progressivism.
If the State is having trobule paying for the ever growing commitments, tyou propose only the solution of more money.
How about a serious round of cleaning up the programs and practices of the State to get it somewhere into the 21 century? Realign the pensions, sick time , sick time buybacks, vacation, medical coverage, etc. etc. so that a state job is no longer FAR more desireable than provate sector job.
maybe nbenefits should be limited to legal resdents, maybe the different admins should all have a QA process to vet receipents.
Maybe the State should act as if the money they spend actually belongs to someone as opposed to falling fromt he sky.
Maybe if Obama did something about generating jobs, our tax system would collect more revenues.
And like all of the pro tax and spend authors, the writer conveniently FORGETS to tell us about the money that is going down the drain to pay for the MA health care law. And even MORE money will be lost when the Libs bow to the new ObamaCare rules and make us pay for those Medicaid Health Care Exchanges. All of the taxes in the world won't save this state from the ever increasing BLOATED budget.
Very Good Point Miker6!! The need for revenue is one direct consequence of Romneycare, which has elevated state spending on health care to record heights. Of course, the cost to the consumer, in the form of higher premiums and lower supply is also evident. As we get into 2014, Obamacare will have had this same affect on the rest of the country.
Cut all elected officials in the Senate and house by 50 percrent. Cut all their expense additions by 75 percent. Publish all government spending on the internet to all to view including all salaries and employment costs.Before you demand tax increases let us all see WHY I NEED TO CUT MY BUDGET TO SUPPORT YOUR BUDGET. MINE IS NOT INFLATED I KNOW BUT I HAVE QUESTIONS ON THE STATES. WHY MUST WE ALL SUPPORT YOUR MISMANAGEMENT AND SQUEEZE OUR BUDGET TO SUPPORT YOUR DICTATES FOR CONSTANT TAXES INCREASES TO SUPPORT THE GOVERNMENTS TAX AND SPEND PRACTICES OF A DEMOCRATIC LEFTIST LIBERAL LEADERSHIP.Drastic measures are needed to curb this situation.....QUESTION....What is the total amount of tax increase are you suggesting? Portion this out to each elected official and let us see the results? Its time for accountability by all greedy hands.
same holds at the federal level
Looks like we have the beginnings of the return of Taxachusetts...
I cannot believe that the HACKS on Beacon Hill are even thinking of raising our taxes, in such trying economic times.
I've let my state rep and senator know the consequences, come election day, if they vote for such idocy. Hopefully if enough of us do the same, they will listen. IF not....
Hello Tax-Free NH.
yes, lets turn into CAlifornia
This opinion piece lacks context. What often gets overlooked in public sector finance speak is very few if any programs actually experience a reduction in absolute funding, mostly what happens is that budgeted increases are reduced i.e "cut". So program funding is still growing, just not at the prior budget level; leading to the reduced rate of growth being referred to as a "cut".
Yes. On the Federal level the official term is "Baseline Budgeting". You can check out the termm on the Internet. And the Globe has NEVER mentioned about this in an article.
Really?! ["The state enacted a series of cuts to the income tax that are now costing us close to $3 billion a year."]
Who is "us"? Income taxes are paid from OUR income ... Simply incorrect that such cuts "are now costing US" anything!
Whole article incorrectly assumes that the money belongs to the State, in the first instance. As Joe Biden would say: That is malarky.
like that money disappears into a mattress
JHDL notes that "Whole article incorrectly assumes that the money belongs to the State, in the first instance. " I would like to make a small correction to your observation:
I would say "Whole article DELIBERATELY assumes that the money belongs to the State, in the first instance. " The article, like many from the Globe, is meant to QUASH opposition by pretending that you have no right to criticize the government.
whywhy is it never a spending problem? how many more scandals do you need as proof the state govt is bloated corrupt and unaccountable. housing authority? probation dept? Jon's for drunks? colleges that pay no taxes as a joke non profit and keep raising tuition each year to grab more fed aid and loans that can't be defaulted from thesejpkids who want a degree?.
Slack, I might have given more credence to your reply to my post had you not lead off with a reference to Fox News. Not everyone who disagrees with what either Our Dearl Leader in Washington or Our Dearl Leader on Beacon Hill has to preach is a Fox News watcher.
As for waste, fraud and abuse, it only takes reading the Globe on a regular basis to know our state government has not been good, responsible stewards of our money. I am not inclined to continue feeding the beast.